Morbidity and Mortality Weekly Report: The latest issue of MMWR, Vol. 63, No. 28, July 18, 2014 (HTML and .pdf formats available from the US Centers for Disease Control site). Note: To access this issue in the future, simply click on “Weekly Report” and then “Past Volumes” on the left side of the page.

Economic institutions enabling trust and cooperation rest on multiplex networks and norms of reciprocity. A key feature of economic institutions is they facilitate commercial transactions by reducing uncertainty and risk in markets. When trust and trustworthiness stem from confidence in community sanctions of norms, principal and agent relations are enforceable without resorting to legal rules and litigation. In this paper, we examine the workings of industrial clusters, a key economic institution enabling the emergence of private manufacturing firms in China. In industrial clusters, manufacturing firms economize on transportation costs, benefit from large pool of specialized human capital and informational spillovers. While agglomeration effects are important, what is missing is the effect of personalized exchange on the competitive advantage of industrial clusters. Comprised of a core group of small and medium sized manufacturers linked to niche suppliers and distributors, cluster location sustains dense multiplex networks that enable community sanctions sustaining self-­‐enforcing trust and cooperation. This in turn enables collective action in solving problems of competitiveness and flexible adaption to changing market conditions. Though the individual firms lack brand names, industrial cluster enables the local industrial niche to secure brand reputation in domestic and global markets.

This paper proffers a theory of endogenous institutional change to explain the emergence of private manufacturing in China’s transition economy. First, we define a set of mechanisms capable of explaining how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the “bottom up.” Specifically, we argue that endogenous institutional change emerges from an interplay between three factors: the value advantage actors associate with decoupling from institutional equilibria, positive externalities derived from similar decoupling among one’s neighbors, and accommodation by state actors. We demonstrate our theory with an agent-based model. We then provide a detailed empirical illustration of our theoretical account with a comparative analysis of two municipalities in China’s Yangzi delta region.

Institute for Fiscal Studies [London, UK] Working Paper: “For love or reward? Characterising preference for giving to parents in an experimental setting,” by Maria Porter and Abi Adams (W14/13, July 2014, .pdf format, 57p.). Note: Links to the abstract and the full text of the paper available at:

US Federal Trade Commission, Bureau of Economics Working Paper: “All-units Discounts and Double Moral Hazard,” by Daniel P. Gibson (Working Paper No. 316, July 2014, .pdf format, 32p.). Note: Links to the abstract and the full text of the paper available at: